Used cars sold on finance rise

Industry figures have shown the number of used cars sold on finance to consumers increased for the fourth consecutive month in October.

A report by the Finance and Leasing Association highlighted that the used-car market recorded a 22% rise in sales supported by finance during the month, compared with October 2009.

The study also showed a 7% hike in value and 11% increase in volume during the month.

However new-car sales dropped by 11% in October, while the business used-car finance market recorded a 34% year-on-year decline in volume.

Paul Harrison, head of motor finance at the Finance and Leasing Association, said: "The continued revival of the used-car market reflects a return to 'traditional' buying habits as buyers look to manage their budgets by seeking out affordable cars and finance.

"Until recently there was a shortage of popular models of used cars and this drove up the price. The end of the scrappage scheme has led to a rebalance of supply and demand. But motor lenders' Christmas cheer will be tempered by the prospect of a tough market in the New Year, as the VAT rise takes effect and public sector spending cuts impact on people's pockets."